M+E Daily

Manufacturers of 3D televisions, videogame accessories, and other consumer electronics could see healthy sales in the second half of 2010 — provided that more consumers return to earning wages and salaries than receiving checks from Uncle Sam. So said Shawn DuBravac, Chief Economist and Director of Research for the Consumer Electronics Association (CEA), at a media briefing in New York today.

DuBravac views the economy as in the midst of a “delicate hand off” from one held up by government stimulus programs to one driven by the private sector. “I’m worried that the consumer won’t be well-positioned to receive the baton.

“Relative to past recessions,” DuBravac said, “[this] recovery is mediocre at best.” Employment has “lagged behind” the rates the country has seen in previous economic recoveries, with the U.S. expected to bear an unemployment rate “north of 9%” at the end of 2010.

While general consumption was up by about 5% year-over-year in March 2010, the increase came “at the cost of savings,” DuBravac said, attributing the growth to an increase in “government transfers” such as unemployment benefits.

The positive sign CEA wants to see in the third quarter, DuBravac said, is “robust job growth.”

Presuming the economic recovery continues to advance, DuBravac holds a generally upbeat sales outlook for product categories including televisions, tablet computers, and videogame accessories.

With manufacturers currently shipping some 70,000 3D TVs a month to retailers, DuBravac looks for the category to see sales of between 1.5 million and 3 million units in 2010. As much as 70% of 3DTV sales will occur in the fourth quarter.

According to a recent CEA survey, 80% of sales associates at electronics retailers see increased consumer interest in 3D sets. Yet roughly half of consumers, sales associates say, remain confused about the technology.

DuBravac reminded his audience that the early years of new technology adoption “are always much slower than one would expect.” Adoption curves, he said, are more “S-shaped” than linear, and “3D is following that trajectory as well.”

Overall television sales for 2010 will still be strong in the U.S. CEA projects sales of 37 million units in a nation of 114 million households. That means roughly one in three households will purchase a new TV this year.

Televisions are the leading example of how well tech products have fared in the current economy relative to other consumer spending categories. Unit sales of TVs, DuBravac said, rose 19% in 2009, as consumers sought out cheap entertainment options. Meanwhile, makers of home furnishings and other products saw their sales “decimated” last year.

Cash-strapped as it is, the consumer electronics market remains receptive to new products. Tablet computers (such as Apple’s iPad) could see 6-8 million unit sales as a category this year. DuBravac noted that the consumer adoption rate of tablet products will follow the sales curve of other new technologies, such as e-readers. (In that product category, manufacturers worked get models on shelves in time for the 2009 holidays, but new product releases still “trickled into” 2010.)

DuBravac said the videogame industry was entering the “back half” of its hardware lifecycle, with manufacturers including Microsoft and Sony recently introduction motion controllers and other new accessories for their respective consoles. During the 2010 holidays, CEA expects to see “some pickup” in console sales due to bundling with these new accessories, but the sales story for the sector will center more on accessories themselves.

Product bundling in general — of 3D televisions with Blu-ray players, for example — will play a major role in driving holiday-season sales, DuBravac said.

“Black Friday,” the analyst added, “is going to be longer than it’s ever been.” Retailers will begin marketing “doorbuster” deals earlier in November, while extending Internet specials beyond Cyber Monday to maintain momentum into December.